High Court Rules New Tobacco Law on Packaging, Labelling and Disclosure Does Not Violate Intellectual Property Rights

British American Tobacco Kenya

Previously, this blogger reported here that the High Court had suspended the coming into force of the Tobacco Control Regulations 2014 made by the Cabinet Secretary for Health scheduled to take effect on 1st June 2015. Recently in the case of British American Tobacco Kenya Ltd v Cabinet Secretary for the Ministry of Health & 4 others [2016] eKLR, Lady Justice Mumbi Ngugi (known to many readers for her landmark decision on anti-counterfeit law and access to medicines here) delivered a judgment at the High Court dismissing claims by ‘Big Tobacco’ that their constitutional rights including intellectual property (IP) rights are being violated by the new Tobacco Regulations.

As expected, Big Tobacco argued that the packaging and labeling requirements under the Regulations are not necessary or proportional because, in its view, the public, including youth, are already well informed of the risks of smoking, existing warnings as required by section 21 of the Tobacco Control Act have been displayed on cigarette packs in Kenya since September, 2008 and there is no evidence to show that the warnings are not seen and assimilated by consumers or that trademarks neutralise consumers’ existing awareness of the risks of smoking.

Therefore Big Tobacco contended that the requirements of packaging and labelling prevent it from fully using its trademarks and the full get up on its package, particularly if the size of the pictures and pictograms exceeds the present size requirements; and that the warning requirements, dependent upon clarification of size, may make it impossible for it to use its trademarks consisting of logos, colours, and other devices placed at certain positions on the package, including , but not limited to, position marks and entire marks.

In rebuttal, the Cabinet Secretary for Health (CS Health) averred that many other countries, including the United Kingdom, France, Ireland and Australia have moved towards standardized plain packaging to achieve important public health benefits vis-a-vis the vested interests of the tobacco industry, and which effectively removes the opportunity to advertise and promote tobacco products by the tobacco industry.

In this connection, the CS Health argued that warning labels are highly effective in reducing tobacco consumption; that  research has established that large, graphic warning labels on tobacco products is an effective way to inform consumers about the harmful impact of tobacco, encourage users to quit and deter non-users from starting smoking; that pictorial warning labels have a greater impact than the text-only labels; and that large and clear images depicting the real effect of tobacco use placed on both sides of the package are more effective in educating members of the public before they engage in tobacco consumption; and the pictorial warnings help tobacco users to easily visualize the nature and severity of tobacco-caused diseases.

With regard to the disclosure requirements under the Regulations, Big Tobacco contended that the product information required to be disclosed under Regulation 42, aside from the risk posed that such product information may be made accessible to the public, comprises manufacturers’ trade secrets or sensitive information, and if such information is availed to the public, manufacturers’ competitors, including illicit manufacturers, would be able to manufacture identical products and this may result to loss of trade and tax revenues to the government. It further contended that in jurisdictions where such disclosure is permitted, steps are taken to ensure that trade secrets and other confidential information is not shared with the public.

In reply, the CS Health argued that Part III of the Regulations is in conformity with section 4 of the Tobacco Control Act, and the disclosures required under this part are meant for counteractive measures in order to control and mitigate tobacco related health perils. It was also asserted that the disclosures are required as tobacco products contain over four hundred (400) harmful ingredients which need to be regulated, controlled and their quantity monitored. Therefore it was argued that the disclosure requirements are reasonable and justifiable in an open and democratic society as required under the Constitution.

On both issues of packaging/labelling and disclosure, the learned judge agreed with the CS Health and the supporting arguments of the Tobacco Control Board, Attorney General, Kenya Tobacco Control Alliance and Consumer Information Network.

With regard to packaging and labelling, the court’s decision reads in part as follows:

“It is evident that the legislative intention behind the above Regulations was to regulate advertising of tobacco products and to ensure that consumers were fully aware of the nature and content of the tobacco products that they consumed. The Regulations in this part are therefore in accord with the parent legislation and the Constitution.

With regard to the date by which the petitioner and others in the tobacco industry are to comply with the regulations in respect of the health warnings, it is correct that there is a conflict between the time given in the Act and that set in the Regulations. Section 21 (4) requires compliance within nine months from the date of publication of such Regulations pertaining to the pictorial warning specifications, while the Regulations provide a timeline of 6 months. This Court stayed the coming into force of the Regulations in June, 2015. Having found that there is no violation of the Constitution or statute in Part II of the Regulations, and bearing in mind the time that has elapsed since the orders suspending the operation of the Regulations was granted, it is my view that a period of six months from the date hereof is reasonable for the implementation of the pictorial health warnings.”

On the issue of the disclosure requirements under the Regulations, the learned judge held that no violations of Big Tobacco’s rights had been demonstrated other than the requirement that tobacco manufacturers and importers must disclose information pertaining to their market share in the tobacco industry in Kenya. The crucial portion of the judgment reads as follows:

“I have considered the provisions of these two Regulations. Regulation 12 deals with product disclosure while Regulation 13 deals with industry disclosure.

The requirements of this regulation are, in my view, clear, and I am unable to see how they violate the petitioner’s constitutional right to intellectual property or to privacy. They are aimed at identifying the products and ingredients used by manufacturers of tobacco products, ensuring that public health authorities have full information about the ingredients in tobacco products, and the health effects thereof.

In any event, it is my view that such requirements and disclosure outweigh the intellectual property rights pertaining to tobacco products, though it must be emphasised that the infringement thereof has not emerged from the petitioner’s case.

Confronted with such a product and a need to balance the public health interests and the rights of the public against the commercial interests of the petitioner and others in the tobacco industry, the choice is fairly obvious.”

In similar fashion as in the Patricia Asero decision on anti-counterfeiting and access to medicines, the learned judge ruled that in the present case the public health interests underpinning the Tobacco Control Act and the subsidiary legislation far outweighed the property rights and commercial interests of the parties at stake, namely trademarks and trade secrets held by Big Tobacco.

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